Last Updated on September 10, 2025 by Admin
Table of Contents
What’s new in September 2025 (quick read)
- India moves to a two-slab structure: 5% and 18% (12%/28% pruned).
- Cement (HSN 2523) drops to 18%; marble/travertine & granite blocks to 5%; sand-lime bricks/stone inlay work to 5%.
- Works contract (Govt. predominantly earthwork & offshore O&G) moves to 18%. Job-work for bricks/pharma/leather/printing/umbrellas to 5% (with ITC = Input Tax Credit); residual job-work now 18%.
Always verify your exact HSN/SAC and scope with the final CBIC notifications linked below.
Construction Services (SAC)
| Service Category | SAC | Rate (till Sep 21, 2025) | Rate (from Sep 22, 2025) | ITC | Notes |
|---|---|---|---|---|---|
| Works contract – general construction/repair/renovation | 9954 | 18% | 18% (no change) | With ITC | Default entry under Notif. 11/2017 (as amended). |
| Works contract – predominantly earthwork (>75%) provided to the Government | 9954 | 12% | 18% | With ITC | Per the GST Council 56th meeting decisions, aligns the Government earthwork to 18%. |
| Sub-contractor supplying to the above Government earthwork contract | 9954 | 12% | 18% | With ITC | Parity with the main contractor from Sep 22, 2025. |
| Works contract – offshore oil & gas E&P in offshore area | 9954 | 12% | 18% | With ITC | Rationalised to 18%. |
| Residential apartments – Affordable (2019 scheme) | 9954 | 1% | 1% (no change) | No ITC | Affordable definition & 80% registered procurement rule apply (RCM on shortfall). |
| Residential apartments – Other than affordable (2019 scheme) | 9954 | 5% | 5% (no change) | No ITC | New rate scheme continues. |
| Commercial apartments in RREP (≤15% commercial area) | 9954 | 5% | 5% (no change) | No ITC | RREP-specific entry under the 2019 scheme. |
| Commercial apartments (non-RREP) | 9954 | 12% | 12%* | With ITC | *No explicit Council change notified in press release; check final CBIC notification. |
| Job-work in relation to bricks | 9988 | 12% | 5% | With ITC | Concessional job-work rate from Sep 22, 2025. |
Real-estate scheme essentials (still applicable): Under the 1%/5% residential scheme, ITC is not available; promoters must procure ≥80% from registered suppliers. Shortfall attracts RCM @ the applicable rate (e.g., cement post-Sep 22 at 18%).
Construction Materials (Goods – HSN)
| Material | HSN | Rate (till Sep 21, 2025) | Rate (from Sep 22, 2025) | Notes |
|---|---|---|---|---|
| Cement (Portland, aluminous, slag, supersulphate, clinkers) | 2523 | 28% | 18% | Headline rationalisation cut. |
| Marble/travertine blocks; Granite blocks | 2515 / 2516 | 12% | 5% | Blocks only (not polished slabs/tiles). |
| Sand-lime bricks / Stone inlay work | 6805 / 6815 (sel.) | 12% | 5% | Specified entries rationalised. |
| Natural sand | 2505 | 5% | 5% (no change) | Common construction sand. |
| Aggregates (pebbles, gravel, crushed stone, macadam) | 2517 | 5% | 5% (no change) | Concrete/road metal/ballast. |
| Ready-Mix Concrete (RMC) | 38245010 | 18% | 18% (no change) | Non-refractory mortars & concretes. |
| Ceramic/vitrified tiles | 6907 / 6908 | 18% | 18% (no change) | Floor/wall tiles (glazed & unglazed). |
| Sanitaryware (ceramic) | 6910 | 18% | 18% (no change) | WC pans, cisterns, basins, etc. |
| Iron & Steel (Chapter 72) — plates, coils, bars, TMT, etc. | 7206–7215 (typ.) | 18% | 18% (no change) | Standard for most items in Ch. 72. |
| Articles of iron/steel (Chapter 73) — pipes, fabricated items | 73xx | 18% | 18% (no change) | Typical construction-use articles. |
| PVC/CPVC/UPVC pipes & fittings | 3917 | 18% | 18% (no change) | Plastics pipes & fittings. |
Transition & Compliance Checklist (Sep 2025)
- Time of supply: Apply revised rates on supplies made on/after Sep 22, 2025; use current rates before that date.
- Contracts & POs: Add a “taxes as applicable on the date of supply” clause; issue change orders where rates shift.
- RCM (real-estate scheme): 80% registered purchase rule continues; pay RCM on shortfall. Cement under RCM becomes 18% from Sep 22.
- ERP update: Map new rates for HSN 2523, 2515/2516 blocks, 6805/6815 items, and job-work SAC 9988 entries.
- Advance receipts: Re-compute differential tax if supply crosses the changeover date; issue credit/debit notes as needed.
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- Top 5 Construction Niches Poised for Maximum Job Creation in India (2025–2030)
- 30 Leading Data Center Construction Contractors & EPCs in India and APAC
FAQs
When exactly do the new rates apply?
From September 22, 2025, for goods and services (except tobacco/pan masala/cigarettes, which shift later on a separate notification).
Did residential 1%/5% rates change?
No. The 2019 scheme for residential projects (1% affordable; 5% other) with no ITC continues. The 80% procurement rule and RCM on shortfall still apply.
What about commercial apartments (non-RREP) at 12%?
As of this update, the Council’s press release does not explicitly revise that entry. Continue with 12% (with ITC) unless CBIC notifies otherwise.
Official Sources
- PIB: Recommendations of the 56th GST Council Meeting (effective dates)
- GST Council: Annexures with detailed goods & services rate changes (incl. works contract & job-work)
- PIB Brief: “GST Reforms 2025” (sector snapshots; cement, blocks, sand-lime bricks)
- CBIC/GST Council FAQ (Real Estate 2019 scheme: 1%/5%, 80% rule, RCM)
- CBIC schedules: Goods & Services GST rates (for baseline HSNs like 2505 sand, etc.)
Disclaimer: This is a practical cheat-sheet. Always verify your exact HSN/SAC and project conditions against the latest CBIC notifications and state circulars.
